Ten days after San Francisco Uber users received emails welcoming them to uberPOOL, a recently-launched service from the transportation service intended to allow "Uber riders to share trips with another rider along their route and reduce the cost of Uber by up to 40%," the California Public Utilities Commission has told the company that their new offering is a violation of state law.
According to Forbes, the problem lies in how California identifies vehicles for hire:
If a company operates as a “passenger stage corporation” or PSC, it can charge people individually for a shared vehicle. This is how SuperShuttle can drive around to multiple neighborhoods, pick people up and drop them all at the airport without running afoul of the law. A “charter-party carrier” or TCP as California calls it, can’t do that. It can only rent out a vehicle by time or distance. Limos and charter buses fall into this category.
Companies like Uber are actually Transportation Network Companies (TNCs), but those companies still follow the regulations laid out for TCPs, including one that states that “[N]o charter-party carrier of passengers shall demand or receive compensation, for the transportation offered on an individual-fare basis,” Forbes reports.
Therefore, the PUC told Uber, everyone needs to hop out of the uberPOOL. (Ugh, sorry.)
According to Cnet, Sidecar, which has been beta-testing a "Shared Rides" option, got a PUC nastygram as well. There's no news yet on if Lyft, which launched its Lyft Line carpooling option in August, has been contacted by the regulatory agency.
An SF Business Times report from September 1 says that the uberPOOL service has a remarkably enthusiastic response even in the pre-launch period, with over 100,000 Bay Area users clamoring to try the offering. As of August, 13,000 SF Sidecar users had tried their Shared Rides option, the company told Cnet.
According to Forbes, the PUC told Uber that “The Commission lacks the flexibility to allow a transportation service that is contrary to the statute If Uber believes that § 5401 is outdated, it may petition the Legislature for a modification. Unless and until the Legislature modifies §5401, the Commission must enforce state law.”
"Our biggest reservation about agreeing to be regulated by the CPUC was that it would slow down our ability to continue to innovate," a Sidecar spokesperson told Cnet. The letter from the PUC "demonstrates our fears were founded."
So what's next for these companies' carpooling offerings? Will they just keep on running their services as a subtle middle finger to the PUC? Will they take the PUC's advice and lobby to change the law? Will they have to go up against Super Shuttle, which Forbes speculates might have tattled on their car service competition?
Your guess is as good as ours — though SFist contacted spokespeople from both agencies, the only response we've received is a canned statement from Uber spokesperson Natalia Montalvo, which read:
“We welcome the opportunity to share with the CPUC the significant benefits of uberPOOL and how it really works so that we can continue to bring its unmatched convenience and affordability to communities and traffic jams across the Golden State.”
Needless to say, this hardly answers the questions we were asking above (don't worry, I wrote back, asking them again). But with Obama's old campaign manager now at Uber to reportedly wage bloody and brutal war against the company's multitude of regulatory disputes, we suspect that this is going to get pretty interesting pretty fast.
